Thursday, 10 February 2011

These cuts aren't fair and we blame Pickles, say LibDem council leaders

Many of the most senior Liberal Democrats in local government have attacked the government's local government spending settlement, publicly declaring no confidence in the fairness of the government's approach to cuts and in Communities Secretary Eric Pickles who the LibDems accuse of "gunboat diplomacy" in an extraordinary letter to The Times (£).

The Times describes the letter from 17 leaders of local authorities and 77 further LibDem group leaders as an "open revolt over the scale and pace of cuts to frontline local services". It is by far the most significant coordinated expression of Liberal Democrat discontent with the Coalition government so far.

The grassroots of the Liberal Democrats have declared open revolt over the scale and pace of cuts to frontline local services.

In a serious blow to the unity of the coalition, 88 Liberal Democrat council chiefs have written to The Times today warning that services for the most vulnerable will have to be cut. The 17 local authority leaders and 71 local party heads say that the spending reductions are too big and are being implemented too quickly.

Local government is the powerbase of Nick Clegg’s party and the move suggests that loyalty to the leadership has been strained to the limit.

The 88 signatories include the LibDem leaders of Newcastle, Hull, Milton Keynes, Warrington and Portsmouth City Councils and their Deputy leader in Birmingham, the leader of the Liberal Democrats in the Local government association, and over 70 more leaders of Liberal Democrat council groups.

The LibDem council leaders say that the decision to both apply the deepest cuts to local government settlements and front-loading these makes it impossible for councils to cut costs in a way which protects services for the most vulnerable, and will inevitably increase costs through making more redundancies necessary.

While the letter endorses the need to reduce the deficit and the broad principle of the Big Society, it makes the cogent critique that the damage to local services will be unnecessarily deep as a result of the political choices to cut deepest and fastest of all in local government, which rules out opportunities to make administrative savings in a cost-effective way.

What has been delivered is a difficult cuts package across all government departments but clearly the most severe is to local government. These cuts will have an undoubted impact on all frontline council services, including care services to the vulnerable.

Rather than assist the country’s recovery by making public-sector savings in a way that can protect local economies and the frontline, the cuts are so structured that they will do the opposite. The local government settlement will take a major hit in this coming financial year and further, smaller, cuts in subsequent years. This front-loading means councils do not have the lead-in time necessary to re-engineer services on a lower-cost base and ease staff cuts without forced, expensive redundancies. Inexplicably, local government is also being denied the opportunity to spread the cost of reorganisation and downsizing over several years — at no cost to central government — which just makes even bigger in-year cuts inevitable The Secretary of State’s role should be to facilitate necessary savings while promoting the advance of localism and the Big Society. Unfortunately, Eric Pickles has felt it better to shake a stick at councillors than work with us.

The letter makes a series of very sharp attacks on controversial Communities Secretary Eric Pickles, the LibDems argue that "local, and central, government are being let down by the Communities and Local Government Secretary who appears unwilling to lead the change that’s so desperately needed".

Highlighting the scale of both ideological and personal clashes which have seen working relationships all but completely break down, the letter charges Pickles with "chastising and denigrating local authorities through the media", failing to try to help local government to avoid cuts to the most vulnerable. The LibDem council leaders call for proper dialogue rather than "the gunboat diplomacy which is the current order of the day".

A detailed Times survey of councils projects the loss of 150,000 jobs in local authorities in the next two or three years, with metropolitan authorities in the north and midlands worst hit. It also highlights the increased risk of legal challenges to local government decisions, because the timetable for immediate cuts demanded by the frontloaded settlement will cut short consultation.

But Pickles has stonewalled Downing Street plans to save the Big Society, as well as the repeated calls from councils not to front-load the deep cuts in the local government settlement.

"There is no doubt that Mr Pickles’ department came bottom of the Whitehall beauty parade in the spending round", write the Times leader writers today. As Polly Curtis of The Guardian, wrote yesterday about the impact of local cuts on the big society, this is a badge of pride for Pickles, who has made a virtue of actively seeking to propose a much tougher spending settlement even compared to his Cabinet colleagues.

The story told by council leaders is that when the communities secretary, Eric Pickles, walked into the office of the chief secretary to the Treasury and offered to cut his own department's budget by 27% last summer, Danny Alexander stared at him suspiciously. Alexander was at the beginning of the toughest spending review in history, and preparing for secretaries of state to dig in their heels, brief the press and do as much as possible to protect their budgets. But even he was left stunned by Pickles's generous offer.

The BBC ten o'clock news last night highlighted just how much the new local government settlement will hit poorer areas harder, with BBC home affairs editor Mark Easton showing that the cuts will be worth £210 per adult in deprived Hackney compared to £2.86 per person in affluent East Dorset. Those councils with high levels of deprivation, and so which are more dependent on grant funding from central government to reduce inequalities, are being hit very hard, while councils which have a strong local economic base from which to raise their own resources will be relatively protected.

A ministerial source tells Easton that the government's intention was to "unwind the process" whereby more deprived areas got more support under Labour. This government thinks that was unfair, and so is seeking to reduce the amount of redistribution towards poor areas in the local government settlement.

So, while urban areas with high levels of poverty, unemployment and health pressures are losing almost 9% of their spending power as a result of the cuts, less deprived districts such as Wokingham in Berkshire are losing less than 1%. Mr Pickles, however, argues that this is because poorer areas have been receiving far more money from central government and therefore have more scope for efficiency savings.

The argument highlights an ideological clash between fairness as promoting redistribution and equal opportunities between more and less deprived parts of the country, and fairness as localism, in proposing that different areas should get to keep more of their own resources.

There is a political dimension too. By proposing a formula which will hit poorer areas harder, the government is doing more to protect areas of Conservative political strength and to hurt Labour ones, showing how the pattern of public spending and cuts could well increase geographical polarisation in British politics.